SBI Share Price in Focus after Rs 25,000 Crore QIP; LIC Raises Stake
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State Bank of India share price will be in focus on Tuesday after the public sector lender successfully raised Rs 25,000 crore through Qualified Institutional Placement (QIP) to fund business growth.
The committee directors of SBI, in its meeting held on Monday, approved the resolution of the issue following the receipt of application forms and the funds in the escrow account from eligible Qualified Institutional Buyers, in line with the terms of the issue, the SBI stated in a regulatory filing.
SBI approved the allocation of 30, 59, 97,552 equity shares at an issue price of Rs 817 per share comprising a face value of Re one each and a premium of Rs 816 each, they said.
SBI QIP was oversubscribed 4.5 times, with foreign investors accounting for 64.3 percent of total demand. The PSU bank stated that marquee long-term investors received 88 percent of the final allocation, including 24 percent of the issue size allotted to foreign long-term investors.
The capital infusion will strengthen SBI’s CET-1 buffer, increasing it to 11.5 percent from 10.81 percent as on March 31, and support calibrated credit growth across the retail, MSME and corporate segments, the bank added.
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LIC, the state-run insurance giant, increased its stake in SBI by participating in the QIP. Receiving an allotment of 6, 11, 99,511 SBI shares.
Thus, LIC’s stake in SBI has been increased from 81, 46, 59,869 equity shares to 87, 58, 59,380 shares, that is, 9.21 percent to 9.49 percent of the paid-up capital of the bank. Other prominent investors in SBI QIP were HDFC Life Instance Company, Quant Mutual Fund and Societe General.
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SBI share price has gained three percent over the past month and rallied nine percent in the last six months. On a year-to-date (YTD) basis, the PSU bank’s stock is up four percent, although it has declined seven percent over the past one year. However, over the long term, SBI share price has delivered robust returns, with the stock surging 324 percent over the past five years, marking a multibagger performance. On Monday, SBI share price ended 0.11 percent higher at Rs 824.20 apiece on the BSE.